Estate planning after a prenuptial agreement

On behalf of Bingham Legal Group PC posted in Estate Planning on Friday, July 18, 2014.

When people get married, they sometimes have a prenuptial agreement in place to ensure that assets are properly protected in the event of a divorce. While prenuptial agreements are a good tool to ensure assets are protected, they might cause some problems down the road as the family's situation changes. In that case, working an appropriate estate plan out becomes vital to ensure that assets are distributed in accordance with your wishes when you pass away.

In some cases, a restrictive prenuptial agreement might seem like a difficult obstacle when it comes to estate planning. In one man's case, the prenuptial agreement left all business assets that he came into the marriage with in his hands and gave his wife very little if he passed away.

The man ended up setting up two family limited partnerships. Upon his death, his wife would become the trustee and beneficiary over the trust in which these partnerships were held. In this case, she would get an income from the business but couldn't make decisions regarding the business. In this way, he was able to ensure she was cared for while protecting the businesses for his two minor children.

Under the structure of the agreement, the man's brother would become the successor manager. When the man's sons turned 30 years old, they would become co-trustees over the business with their uncle. At 35 years old, they would move to the sole trustees.

This man was able to determine a way that he could honor the prenuptial agreement while still giving his family the financial stability they would need if something happens to him. Dealing with situations like this can be complex, so it is vital for Michigan residents to understand laws surrounding prenuptial agreements, estate planning and business law to ensure arrangements are legal and wishes are properly conveyed.

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